RioCan Real Estate Investment Trust Announces First Major Sale Transaction Under Its Major Market Strategy
November 28 2017 - 7:00AM
RioCan Real Estate Investment Trust (“RioCan” or the “Trust”)
(TSX:REI.UN) today announced that it has entered into an agreement
with CT Real Estate Investment Trust ("CT REIT") for the
sale of seven retail properties, all of which are anchored by a
Canadian Tire banner, for a total sale price of $200 million. The
annualized income based on the first nine months of 2017 for the
portfolio is approximately $12 million.
The sale is the first transaction to be
completed as part of RioCan’s previously announced plan to
accelerate its portfolio focus in Canada’s six major markets
through the sale of approximately 100 properties located largely in
secondary markets across Canada.
Edward Sonshine Chief Executive Officer of
RioCan, said, “We are very pleased to report good progress on the
execution of our accelerated strategy in such a short time. This
transaction reinforces the quality and anticipated value of the
properties allocated for sale, which are largely highly stable
assets that appeal to a wide range of buyers. We have been very
pleased with the initial response to the announcement, and we are
in various stages of negotiations on several transactions
representing properties that we expect to be able to provide more
details on in the first quarter of 2018. Overall, we are very
confident in our ability to complete our disposition program and
execute our strategic vision within our initial timelines
provided.”
The sales are subject to normal closing
conditions with the majority expected to close in December 2017,
and the remainder to close in the first quarter of 2018. The net
proceeds will be used to pay down debt, fund unit repurchases
through RioCan’s Normal Course Issuer Bid program and fund the
Trust’s development activities. Since the renewal of the program on
October 20, 2017, RioCan has purchased 2,526,687 units at an
average purchase price of $25.54.
The properties included in the agreement
are:
Property Name |
Location |
Net Leasable Area (sf.) |
Collingwood Centre |
Collingwood, ON |
210,000 |
Goodlife Centre |
St. Catharines, ON |
144,000 |
Orillia Square Mall |
Orillia, ON |
318,000 |
Parkland Mall |
Yorkton, SK |
264,000 |
Southwinds Crossing |
Oliver, BC |
73,000 |
Sudbury Place |
Sudbury, ON |
148,000 |
Upper James Plaza |
Hamilton, ON |
126,000 |
As previously disclosed, RioCan’s accelerated
strategy is intended to further enhance the quality, growth profile
and resilience of the Trust’s portfolio of retail focused,
increasingly mixed-use properties located in prime, high density,
transit oriented areas where Canadians want to shop, live and
work.
About RioCan
RioCan is Canada’s largest real estate
investment trust with a total enterprise value of approximately
$13.9 billion at September 30, 2017. RioCan owns, manages and
develops retail-focused, increasingly mixed-use properties located
in prime, high-density transit-oriented areas where Canadians want
to shop, live and work. Our portfolio is comprised of 294
properties, including 16 development properties, with an aggregate
net leasable area of approximately 45 million square feet. To learn
more about how we deliver real vision on solid ground, visit
www.riocan.com.
Forward Looking Information
This news release contains forward-looking
information within the meaning of applicable Canadian securities
laws. This information includes, but is not limited to, statements
concerning RioCan’s disposition strategy, as well as statements
with respect to management’s beliefs, plans, estimates, and
intentions, and similar statements concerning anticipated future
events or expectations that are not historical facts.
Forward-looking information generally can be identified by the use
of forward-looking terminology such as “may”, “will”, “would”,
“expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, or
similar expressions suggesting future outcomes or events. Such
forward-looking information reflects management’s current beliefs
and is based on information currently available to management. All
forward-looking information in this News Release is qualified by
these cautionary statements.
Forward-looking information is not a guarantee
of future events or performance and, by its nature, is based on
RioCan’s current estimates and assumptions, which are subject to
numerous risks and uncertainties, including those described under
“Risks and Uncertainties” in RioCan's Management's Discussion and
Analysis for the period ended September 30, 2017 ("MD&A"),
which could cause actual events or results to differ materially
from the forward-looking information contained in this News
Release. Those risks and uncertainties include, but are not limited
to, those related to: liquidity and general market conditions;
tenant concentrations and related risk of bankruptcy or
restructuring (and the terms of any bankruptcy or restructuring
proceeding), occupancy levels and defaults, including the failure
to fulfill contractual obligations by the tenant or a related party
thereof; lease renewals and rental increases; the ability to
re-lease and find new tenants for vacant space; retailer
competition; changes in Ontario's rent control legislation; access
to debt and equity capital; interest rate and financing risk; joint
ventures and partnerships; the relative illiquidity of real
property, the timing and the ability of RioCan to sell certain
properties; and the valuations to be realized on property sales
relative to current IFRS values; unexpected costs or liabilities
related to acquisitions and dispositions; development risk
associated with construction commitments, project costs and related
approvals; environmental matters; litigation; reliance on key
personnel; unitholder liability; income, sales and land transfer
taxes; and credit ratings.
Except as required by applicable law, RioCan
undertakes no obligation to publicly update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise.
CONTACT INFORMATION
Edward Sonshine, O. Ont., Q.C.
Chief Executive Officer
(416) 866-3018 | sonshine@riocan.com
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